ANNUAL REPORT 2009 FUGRO N.V. FUGRO 2009 REPORT ANNUAL fugro N.V. Annual Report 2009 Colophon Fugro N.V. Veurse Achterweg 10 2264 SG Leidschendam The Netherlands Telephone: +31 (0)70 3111422 Fax: +31 (0)70 3202703 Concept and realisation: C&F Report Amsterdam B.V. Photography and images: Fugro N.V. Fugro has endeavoured to fulfil all legal requirements related to copyright. Anyone who, despite this, is of the opinion that other copyright regulations could be applicable should contact Fugro. This annual report is a translation of the official report published in the Dutch language. This annual report is also available on www.fugro.com. For complete information, see www.fugro.com. Fugro N.V. Veurse Achterweg 10 P.O. Box 41 Cautionary Statement regarding Forward-Looking Statements 2260 AA Leidschendam This annual report may contain forward-looking statements. Forward-looking statements are statements that are not historical facts, including The Netherlands (but not limited to) statements expressing or implying Fugro N.V.’s beliefs, expectations, intentions, forecasts, estimates or predictions (and the Telephone: +31 (0)70 3111422 assumptions underlying them). Forward-looking statements necessarily involve risks and uncertainties. The actual future results and situations Fax: +31 (0)70 3202703 may therefore differ materially from those expressed or implied in any forward-looking statements. Such differences may be caused by various E-mail: [email protected] factors (including, but not limited to, developments in the oil and gas industry and related markets, currency risks and unexpected operational www.fugro.com setbacks). Any forward-looking statements contained in this annual report are based on information currently available to Fugro N.V.’s manage- Trade Register number 27120091 ment. Fugro N.V. assumes no obligation to make a public announcement in each case where there are changes in information related to, VAT number 00 56 21 409 B01 or if there are otherwise changes or developments in respect of, the forward-looking statements in this annual report. Contents ■ Preface from the President ■ Annual Accounts 2009 79 and Chief Executive Officer 2 1 Consolidated statement of comprehensive income 80 ■ Fugro at a glance 3 2 Consolidated statement of financial position 82 Major developments in 2009 3 Key figures 4 3 Consolidated statement of changes in equity 83 Mission and profile 6 Fugro’s activities 7 4 Consolidated statement of cash flows 85 Financial targets and strategy 8 Information for shareholders 10 5 Notes to the consolidated financial statements 87 ■ Report of the Supervisory Board 15 6 Subsidiaries and investments of Fugro N.V. accounted for using the equity method 145 ■ Report of the Board of Management 21 General 21 7 Company balance sheet 148 Acquisitions 21 Capacity planning 23 8 Company income statement 149 Financial 24 Dividend proposal 28 9 Notes to the company financial statements 150 Market developments and trends 29 Backlog 30 10 Other information 155 Postbalance sheet date events 31 Outlook 31 Report of Stichting Administratiekantoor Fugro Important and interesting contracts 34 (‘Trust Office’) 158 Geotechnical division 36 Historical review 160 Survey division 38 Glossary 162 Geoscience division 40 ■ Theme: Wide spectrum of services 43 ■ General information 56 Corporate Social Responsibility (CSR) 56 Health, Safety and Environment (HSE) 63 Information and Communication Technology (ICT) 64 Research and development 64 ■ Risk management 65 ■ Corporate governance 70 Annual Report 2009 ■ Preface from the President and Chief Executive Officer Dear shareholders and other stakeholders, Looking to the future, we see some trends in the market which may indicate that the worst is likely to be behind As a result of the economic recession caused by the us, but some further hurdles will undoubtedly be met on financial crisis the market circumstances have drastically the way to a world wide recovery. With the recovery in the changed over a very short time. In the past year this has price of oil (to approximately USD 75 per barrel) the oil manifested itself in a decrease in spending by our clients. and gas sector, which is very important for Fugro, should After several years of shortages in capacity, resources are now have some room to invest in exploration activity and now underutilised in several market sectors and in production capacity for the future. With a further consequently putting pressure on prices. recovery of the world economy, other sectors in which we are active should also be able to resume growth. We have responded to this with cost savings and by realigning capacity, for example by releasing some Having taken the necessary measures in the past year, chartered vessels. Unfortunately, it has also been Fugro is well positioned to successfully continue its necessary to reduce the number of staff in some of our operations in the current economic conditions. With business units. There were also positive developments, some 13,500 enthusiastic and highly professional such as the increased activities for offshore wind farm employees we are ready to grow in line with further projects and the increased usage of ROVs during economic recovery. Our confidence in the future is also installation work at sea. reflected in the proposal to maintain the dividend at the same level as last year. After several consecutive record breaking years, the changed circumstances have led to revenue and profit in Yours faithfully, 2009 being lower than in the previous year; revenue Fugro N.V. decreased by 5% to EUR 2.05 billion and net profit decreased by 7% to EUR 263.4 million. Despite less favourable market circumstances, our healthy financial position enables us to continue to invest in people, technology and equipment needed to grow in future. Using well-trained and experienced staff and state of the art equipment is key to our ability to respond successfully to new opportunities: working in deeper water, alternative energy developments, accurate K.S. Wester mapping from the air etc. In the ‘Wide spectrum of President and Chief Executive Officer services’ section of this year’s report, some of these developments are highlighted. 2 ■ Fugro at a glance ■ MAJOR DEVELOPMENTS IN 2009 • In 2009 Fugro’s revenue decreased by 4.7% to • Earnings per share decreased by 10.8% to EUR 3.46 EUR 2,053.0 million (2008: EUR 2,154.5 million). (2008: EUR 3.88). Cash flow per share was 0.3% lower Revenue decreased organically by 5.6% and at EUR 5.99 (2008: EUR 6.01). increased 1.1% as a result of acquisitions. The foreign currency effect was 0.2% negative. • It is proposed to maintain the dividend for 2009 at EUR 1.50 per (certificate of an) ordinary share • The net result decreased by 7.1% to EUR 263.4 (2008: EUR 1.50), to be paid at the option of the million (2008: EUR 283.4 million). holder in cash or in (certificates of) ordinary shares. • The net profit margin decreased to 12.8% • The investments for the capacity renewal and (2008: 13.2%). expansion decided on in 2006 were continued according to plan and amounted to EUR 250.0 • Earnings before interest, taxes, depreciation and million in 2009. amortisation (EBITDA) increased with 3.0% to EUR 551.1 million. • The annual revenue of the in 2009 acquired companies amounts to EUR 34.8 million. The total • The results from operating activities (EBIT) cost of the acquisitions completed in 2009 was decreased by 4.7% to EUR 367.4 million (2008: EUR 37.5 million. EUR 385.7 million). • The backlog at the start of 2010 amounted to • All three divisions were profitable. However, the EUR 1,364.0 million, compared to EUR 1,600.4 Geoscience division, which includes exploration million as at the beginning of 2009, which is 14.8% related services, saw a noticeable decline in lower. The order backlog for work to be carried out profitability. The Geotechnical division and Survey covers eight months. division were largely able to mitigate the effects of the changed market situation. Theterm‘shares’asusedinthisAnnualReportshould,withrespecttosharesissuedbyFugroN.V.,beconstruedtoincludecertificatesofshares(alsoreferred toas‘sharecertificates’or‘depositaryreceipts’forshares)issuedbyStichtingAdministratiekantoorFugro(alsoreferredtoas‘FugroTrustOffice’or‘Trust Office’),unlessthecontextotherwiserequiresorunlessitisclearfromthecontextthatthisisnotthecase.Forfurtherinformationpleaserefertopage74. Fugro at a glance 3 Change ■ K E Y F I GU RES 2009 in % 2008 2007 2006 2005 Result (x EUR million) Revenue 2,053.0 (4.7) 2,154.5 1,802.7 1,434.3 1,160.6 Gross profit (net revenue own services) 1,428.6 (0.3) 1,432.2 1,197.9 931.2 754.9 Results from operating activities (EBIT) 367.4 (4.7) 385.7 324.8 211.6 144.1 Earnings before interest, taxes, depreciation and amortisation (EBITDA) 551.1 3.0 535.2 439.6 295.9 218.8 Cash flow 456.8 4.1 438.9 337.1 226.1 176.1 Net result 263.4 (7.1) 283.4 216.2 141.0 99.4 Net margin (%) 12.8 13.2 12.0 9.8 8.6 Interest cover (factor) 47.8 14.1 13.1 10.9 7.2 Capital (x EUR million) Balance sheet total 2,366.3 11.4 2,123.3 1,700.1 1,405.7 1,138.7 Group equity 1,199.5 28.2 935.8 707.0 565.8 470.8 Solvency (%) 50.2 43.7 41.2 40.0 40.9 Return on shareholders’ equity (%) 24.9 35.9 35.4 28.6 30.4 Return on invested capital (%) 23.5 29.7 30.0 23.7 22.3 Assets (x EUR million) Tangible fixed assets 1,043.2 21.4 859.1 599.3 412.2 262.8 Investments (including acquisitions and assets under construction) 359.6 (8.8) 394.4 341.1 245.9 90.4 Of which: assets of acquisitions 9.9 14.4 8.7 21.0 10.1 investments 320.4